This week saw a strong rise in Bitcoin price, briefly approaching the $70,000 mark. This movement gave rise to various discussions in the market about whether Bitcoin has reached the bottom or whether it is still under the influence of the bear market.
Options Market and Market Fragility
According to the latest developments in the options market, positioning in Bitcoin derivative products has moved to the negative gamma regime. Gamma is an important indicator for market makers’ risk management. In a negative gamma environment, sudden price movements can often grow more rapidly; This includes both rapid upward rallies and sudden declines.
The GEX heat map published by Glassnode reveals that there is no strong resistance above the current price. This indicates that the obstacles to the upward movement of the price have decreased, but the market is still structurally weak. Since a strong protection line has not been formed, uncertainty continues as to whether the increases will become permanent.
Signal of Increase in Spot Demand for the First Time
According to CryptoQuant data, Bitcoin’s net spot demand increased for the first time since November. This metric reveals the relationship between new supply generated by the market and demand from buyers. When demand begins to outpace supply, it means new buyers are more active in the market.
On the other hand, similar increases were observed in the interim periods in previous bear markets. Experts state that a real trend change must be supported by strong demand that increases continuously for several weeks.
Short-Term Investors Continue to Sell at a Loss
Another notable data appeared in the indicators that track the profit-loss situation of short-term Bitcoin holders. CryptoQuant statistics show that short-term investors have been selling at a loss since late January. At the beginning of February and recently, there were fluctuations indicating that the losses in this group were increasing further.
This type of move is known as capitulation in market terminology and generally refers to the exit of weaker hands from the market. However, the fact that this indicator has not yet fully reversed reveals that the risk continues.
Technical Indicators and Institutional Demand
Bitcoin’s RSI (relative strength index) indicator has recovered after falling into oversold territory in early February. Historically, such increases in the RSI can pave the way for short-term recoveries. Additionally, quarterly performance data also reveals that Bitcoin generally does not face multiple hard losses in a row.
On the side of institutional investors, a strong recovery has not been seen yet. Large investment funds and advisors significantly reduced positions in the fourth quarter, according to ongoing outflows in Bitcoin ETFs toward the end of the year and U.S. Securities and Exchange Commission data. This picture indicates that corporate demand has not recovered.
Bottom Signals Are Seen, Ascension Confirmation Is Missing
Although some early signs of recovery have emerged in the market, a full-fledged bull market activation is yet to be seen. While demand in the spot market is increasing, signs of capitulation also show that it is changing hands from partially weak investors. However, short-term holders are still selling at a loss and corporate flows remain weak. The options market also points to market structural imbalance.
